Bitcoin Blog a1

Tuesday, August 29, 2017

BCH and taxes, and possible Fraud

There are rumors going around that the recent Bitcoin fork, the creation of Bitcoin Cash (BCH), could be treated by the IRS as a taxable event. Here is an article on the topic. I only have one minor gripe with the article, where it says, "Bitcoin cash recipients could owe tax this year at rates as high as 39.6%". This quote is potentially slightly misleading. To mean it implies that there is something special about BCH that would cause it to be taxed at this rate, however, this is just the highest rate that ordinary income can be taxed at. There is nothing special about it.

So there is no guarantee BCH will be taxed. But it is interesting to think, what would be a tax payer's basis in BCH if its acquisition is not a taxable event? Perhaps part of their basis in BTC could be transferred? Who knows, this is all unprecedented.

In other news, some people are predicted downward movements in Bitcoin's price. Here is one opinion on the subject.